Do you think a brand-new home means a bigger price tag? Think again.
The housing market is going through a unique time right now. The Census and the National Association of Realtors (NAR) both say that the median price of a newly built home is less than the median price of an existing home, which means that the home has already been lived in.
Yes, you read that right. That brand-new house that has never been lived in might be less expensive than the one down the street that was built 20 years ago. Here’s what you should know if you gave up on a new build because you thought it would be too expensive. You might be missing out on some of the best housing options out there right now.
Why Are Newly Built Homes Less Expensive Right Now?
1. Builders Are Building Smaller Homes
Builders are aware that buyers are having a hard time with affordability right now. They aren’t building big houses because they might not sell. Instead, they are building smaller ones that will. The Census says that the average size of a newly built single-family home has shrunk a lot in the last few years (see graph below):
A lot of the time, the price goes down with the size. It costs less to build smaller homes because they need fewer materials. That helps builders keep costs low so that more people can buy their homes.
2. Builders Are Offering Price Cuts and Incentives
A group called the National Association of Home Builders (NAHB) says that 34% of builders lowered their prices in May. The average price drop was 5%. They do that because they want to sell the stock they already have before they make more.
Plus, 61% of builders also offered extras to get people to buy, such as helping with closing costs or lowering your mortgage rate. All of these things are done by builders to make their homes more affordable so that they can sell in today’s market.
Your Next Step? Ask Your Agent What’s Available Near You
Talk to your real estate agent about what builders are doing in and around your area if you’re looking to buy a house right now. They can help you find new home communities, builders who are offering deals or incentives, and hidden gems that you might not find on your own.
Also, the steps you need to take to buy a brand-new home are often different from those you need to take to buy a second-hand home. That’s why you need your own agent to help you understand the fine print. There should be a professional in your corner who will speak up for you, negotiate for you, and make sure your best interests are met.
Bottom Line
One that is brand new and has all the latest features could be bought for even less than some older homes. Talk to a real estate agent in your area about what you want and find out if a newly built home is right for you.